The Reject Shop (TRS) - almost hit $15

**h2so4** · 15-03-2013, 07:20 PM

Ha! Winner spot on mate. It would have been good buying at these prices.

**winner69** · 28-11-2014, 07:10 PM

One of my old favourites is The Reject Shop and never gone off the watchlist

Trading the big trends has been profitable in the past

Getting interested again .... been crucified the last month or so and $6 is beginning to look cheap

Still growing .... probably sell $650m of crap this year and make $15m-$20m (at $20m PE currently about 8)

Watching closely .... even with the **** sentiment in Australia at the moment

**NZSilver** · 29-11-2014, 09:32 AM

Agreed winner, was in aus mid year for a trip up the east coast in a van, and found reject shop handy on several occasions to buy things - matches, pillows, bowels ect, all stuff I just left in the hired campervan after we left. The shops were alway busy and in prime spots in the malls. All stuff you wouldn't bother ever buying online so prob not much competition there

Obviously been down in a massive downtrend so I've been keeping eye on it.

But as yourve said fundmentally it's looking cheap.

Corporate · 01-12-2014, 12:47 AM

Hi W69, I also keep an eye on TRS.

The one thing I think people misunderstand when looking at the TRS results is that the P&L and cash flow are both heavily influenced by the cost of opening new stores, in terms of both expensed P&L costs, capex, and working capital. To put this into context in the last four years TRS have opened just over 110 new stores.

At some point - I think around 400 stores - the spending on new stores will cease and TRS will focus on optimisation and harvesting some good cash flow from the business.

**silverblizzard888** · 01-12-2014, 01:34 AM

Originally Posted by Corporate

Hi W69, I also keep an eye on TRS.

The one thing I think people misunderstand when looking at the TRS results is that the P&L and cash flow are both heavily influenced by the cost of opening new stores, in terms of both expensed P&L costs, capex, and working capital. To put this into context in the last four years TRS have opened just over 110 new stores.

At some point - I think around 400 stores - the spending on new stores will cease and TRS will focus on optimisation and harvesting some good cash flow from the business.

I agree as well, if you break down the annual statement and check out that sales have actually increased and why profit has ended up lower its because of added expenses in opening new stores and impairment in assets. Once they stop opening so many stores they will start to optimise their expenses, considering they have opened a third warehouse not to long ago I assume this will help build economies of scale and expense ratio will lower. I think pricing now is good for a business in its growth phase, a little lower and I'd find it view attractive. Given the 30 odd cents dividend a year $5 would be optimal pricing as it would meet my goal of what I could get in the bank for interest (well maybe a little better)while I wait for it to boost profits, I think if I didn't get a slight premium it wouldn't be worth it for the risk. If history is anything to go by, they have two year fluctuations, they could well be up to $15 again at the start of 2016. All my imagination anyway. DYOR

**macduffy** · 01-12-2014, 06:58 AM

For what it's worth, there's been comment in Aust recently that TRS has branched out from its " low cost/basic goods" approach into stocking larger, more expensive appliances/capital goods with consequent increases in inventory and slowing of stock turn. At least, that's the talk.

**winner69** · 26-01-2015, 08:35 AM

Still watching

Still sinking to multi year lows and under 6 bucks .....long way from peak of nearly 20 bucks

I reckon another decent trade coming up .....just look at long term chart from IPO with its decent ups and downs

Sometime soon